1099B received by Decedent

Forum|Forum|6 years ago
April 24, 2020
5 replies
34 views

1099B was received by Decedent for stock sales after death. How do I report on the 1040? I can either increase cost to equal proceeds? or enter another line with basis =proceeds and proceeds =basis with a description including the EIN of trust to negate the gain/loss.

I know to report on the 1041.

What do you suggest?

ProSeries Professional

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BobKamman

Level 15

Was it delivered to the cemetery? More likely, it was received by a survivor. Who got the money? Who told the broker to sell, but didn't tell the broker the account should be closed? How long after death -- two weeks, or two years? Not that it matters, except for figuring out if there was a gain or loss based on FMV at date of death.

J

jgcpaAuthor

Level 5

Let me restate the issue. The 1099B was reported with the social security number of the decedent. How do I nominee the sale in Proseries? Where do I input code N for nominee ?

BobKamman

Level 15

I feel another case of "Trick the IRS Computer" coming on. Why would there be a nominee distribution here? Just report on the final return, any sales that happened before death. Don't include any sales after death. There is no Internal Revenue Code section that requires balancing a 1099 to a return. Contrary to urban legend, the CP-2000 process is not 100% automated. A real person looking at what the match kicks out, will notice the taxpayer is dead, and will notice the sales occurred afterwards.

I would attach a one-paragraph explanation to the return, not that anyone will read it when filed, but a copy can be sent in the unlikely event that IRS reopens and asks about it next year. OK, IRS is likely to reopen.

It's true that IRS Pub 559 tells us to use the "Nominee Distribution" method on Schedule B, for interest and dividends received after death. It also tells us to issue a 1099 to the nominee. Were you planning on issuing a 1099B to the estate? But the Schedule B procedure is for administrative convenience, and there are no such instructions for Schedule D.

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